- 85 -

The Law

Revisiting - XXIX

Start with creating your master plan for life in writing. The master plan should clearly bring out your final target and the milestone targets, all with time frames. You will need to visit your master plan intermittently, to correct the plan for conditions not envisaged by you while creating the original plan. While reviewing the plan, you will not downgrade the final goal; you will only moderate the strategy.

Carry out a diligent analysis of your earning-expense balance. If necessary, seek assistance of a person or one of your mentors, to help in learning the process. Identify areas where you are deviating from the budget and take a special note of your unplanned expenditures. Your budget should have provided for some unplanned expenditures for as you embark on a growth path, some unplanned expenditures do come up. If your actual unplanned expenditure is deviating from the budget, examine critically. 

We have already discussed on you cost of abundance - how much wealth do you need to generate and how much money do you need to invest to reach your final goal. I had said that ideally your your expenses towards your sustenance and your expenses towards your expenditures on abundance should come from your investments. It should not become necessary to touch your nest egg. Once you are able to ensure this, you are freed of all worries of survival and have more energy at your disposal to focus on your legacy, on serving others, on becoming a wealth creator and on your other abundance goals.

As you gain more knowledge and expertise in your current area of work, raise the price of your time and services. This is where your effort to excel in whatever you do starts paying off. There are two ways for handling any assignment. The first way is to remain mediocre as the effort needed to upgrade self proves to be too much. And the second way is to continually upgrade oneself. The first option is followed by most and the second by those who want to make a difference. If you follow the first option, the number of years that you put in your job or business has no value. If you follow the second option, you become bigger and bigger, you start giving value added service to your employer and customers, you take larger responsibilities and you develop an attitude of excellence. Your value goes up and so does your earning. Your value is in your hands. Raise your value to get more.

Examine your debts. Prioritise repayment of debts. Pay off the high interest debts first. Do not look at the interest rates at their face values. There are some debts which give you good benefits in term of income tax benefits. look at the effective interest rates and repay the most adverse ones first. Without a second thought, you should target to pay off all your credit card debts; they are most obnoxious kind of debts. How many credit cards do you hold? Each one of them is a temptation. 

The entire personal financial planning is supported by four pillars. 

The first pillar is a budget. A budget is not created to scrounge and expense cuts. A budget give you three clear projections. It tells you how much wealth do you need to reach your goals.  It tells you which are the expenses you are going to prioritise given your revenue. It tells you how much additional revenue do you need to meet the expenses of all the activities that will keep you on track to your milestones. 

The second pillar is debt management. As discussed earlier, get rid of expensive debts. If the effective interest that you pay on a debt is more that 8%, get rid of the debt. I personally like to be debt free as that increases my credit worthiness should I be in need of short-term funds for driving towards my goals.

The third pillar is supplementing your earning. The avenues could be a second job if the terms and conditions of your current employment permits, taking shot term projects where your skills are required, e-commerce opportunities opened up by the internet, affiliate marketing, skill marketing through Fiverr, digital marketing etc. 

The fourth pillar is to make your money work hard to make more money. Your appetite for risk determines your investment portfolio. You can trade in stocks, bonds, debentures etc. In no case, get lured by the get rich overnight schemes.

We are almost at the end of the process. Build your abundance on a strong foundation of learning, growth, effort and correct paradigms, instituting the right processes, building a supporting tribe of mentors who challenge you and push you.

I will recapitulate briefly the most important "psychological" issues in the next post to remind you yet again that abundance is a result of integrating growth of mind, body and spirit.

Namaste

Prabir